JGBs edge higher as investors await outcome of BOJ policy meeting

TOKYO, July 11 Wed Jul 10, 2013 10:27pm EDT

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TOKYO, July 11 (Reuters) - Japanese government bond prices inched up on Thursday as investors waited the outcome of the Bank of Japan's policy meeting, taking their cues from U.S. Treasuries after Federal Reserve Chairman Ben Bernanke affirmed accommodative monetary policy would be in place for a while.

* The Bank of Japan is widely expected to hold monetary policy steady at the conclusion of its regular two-day meeting and could hike its view of the economy.

* On Wednesday, Bernanke said the Fed was somewhat optimistic on the outlook for the economy, but that inflation was low, fiscal policy was quite restrictive and highly accommodative monetary policy would be needed for the foreseeable future.

* "We're not expecting anything from the BOJ today, and now we're not expecting anything the other way from the Fed for a while, either," said a fixed-income fund manager at a Japanese trust bank.

* The yield on the benchmark 10-year cash JGB edged down 1 basis point to 0.840 percent, still holding to the range of 0.8-0.9 percent in which it has mostly traded since late May. The five-year bond yield slipped half a basis point to 0.30 percent.

* The 10-year JGB futures contract ended morning trade up 0.20 point at 142.83.

* The superlong tenor was steady, with yields on 20-year bonds and 30-year bonds both flat, at 1.735 percent and 1.865 percent respectively.

* The market shrugged off data released early Thursday that showed Japan's core machinery orders rose 10.5 percent in May from the previous month, beating economists' median estimate of a 1.3 percent gain.

* Separate data from the finance ministry showed that Japanese investors turned net buyers of foreign bonds last week, snapping up the largest amount since September 2012 and breaking a seven-session net selling streak.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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